Viability Consequences of Planning Obligations Not Material to the Determination of an Application To Discharge or Modify Those Obligations Under s.106A

In the long awaited decision on the appeals by Hodson Developments (Ashford) Ltd and others against the non-determination of their applications to Ashford Borough Council and Kent County Council to modify or discharge 122 obligations contained in the 2017 Section 106 Agreement governing the 5,750 dwelling development at Chilmington Green, Ashford, the Inspector has dismissed all but 5 of the requests outstanding at the close of the Inquiry. The appellants were seeking a reduction in s106 costs of c£99M.

In doing so, in respect of each modification request, the Inspector asked the four essential questions under s.106A(3) – What is the current obligation? What purpose does it fulfil? Is it a useful purpose? Would the obligation serve that purpose equally well if it had effect subject to the proposed modifications.

Of wider importance, in reaching his decision, the Inspector rejected the appellants’ claim that the relevant obligations rendered the development unviable, thus frustrating its progress which, in turn went to the purpose of the obligation and justified discharge or modification. He held that:

“…if a planning obligation is duly completed, although it may have the effect of “frustrating” the development in the sense that it prevents progress in the eyes of a developer unless and until certain acts are performed, and although ultimately circumstances may obtain such that it is no longer regarded (by some at least) as a viable project, that seems to be a consequence, and not part of the original purpose or reason for exacting the obligation in the first place”

He added:

“An obligation can have a useful purpose of preventing development or further development until performed. This may make it inherently impossible, for financial viability reasons, to carry out or complete a development, but that does not necessarily deny the usefulness of the purpose in preventing a development that would otherwise be unacceptable in planning terms. Circumstances may throw light on whether the purpose continues to be “useful” but viability issues would not transcend the basic question of whether the obligation continues to meet any useful purpose.”

The Inspector concluded that the appellants’ approach invited a merits based approach to whether to modify or discharge based on the benefits or otherwise of the development. He found this to be an incorrect analysis as:

“That would introduce an over-arching planning balance within the process. Appraisal of planning benefits and balance should not override the s106A process”

Simon Bird KC and Jonathan Welch acted for Ashford Borough Council.

The appeal decision may be found here.

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